Steps in Consumer Decision Process
1. Need recognition 2.Search for information 3. Evaluation of Alternatives 4. Purchase and consumption 5. Post purchase
consumer has unsatisfied need and wants to go from needy state to desired state. Great discrepancy, the greater the need recognition. Functional: performance of product/service Psychological: personal gratification w product/service. The vast majority of products and services are likely to satisfy both of these criteria to different degrees.
Search for information
Search for options that exist to satisfy need. Internal: examines memory and knowledge through past experiences. External: talking w friends, family, salesperson, commercial media, sponsored media, internet.
Evaluation of Alternatives
happens while engaged in research. Universal sets: all possible choices. Retrieval sets: brands or stores readily remembered. Evoked set: alternative brands or stores considered when purchasing. Evaluative criteria: set of important attributes about a certain product. Determinant attributes: features that are important. Consumer decision rules: criteria (consciously or subconsciously) to select among alternatives- a) compensatory decision rule: good characteristics compensate for bad characteristics. B) noncompensatory decision rule: chose product based on one characteristic. C) decision heuristics: mental shortcuts to help narrow down choices. (price, brand, product presentation)
Purchase and consumption
determine best value, then put to use. Ritual consumption: behaviors affect what/how we consume. (starbucks coffee, crest toothpaste)
positive: a) satisfaction: high consumer expectations of product lead to high sales first, but result in dissatisfaction if product fails expectations. b) personal dissonance: buyer's remorse, psychologically uncomfortable when expectation levels aren't met. c) customer loyalty: customer relationship management (CRM) programs to retain them. d) undesirable customer behavior: do not repeat purchase or recommend product.
Factors Influencing the Consumer Decision Process
elements of marketing mix, psychological factors (motives, attitudes, perception, learning), social factors (family, reference groups, culture), situational factors (purchase situation, temporal state). Cognitive attitude: what we believe to be true. Affective: what we feel about the issue. Behavioral: actions we undertake w regard to issue.
Factors influencing the consumer search process
is it worth the time and effort to search for info (perceived benefits verse perceived costs)? Internal locus of control: have control over outcomes of their actions-more search. External locus of control: fate controls all outcomes. Performance risk: danger inherent in a poorly performing service. Financial risk: cost of purchase and cost of use. Psychological risks: way people will feel if the product doesn't convey right image.
Functional Needs (pt of step 1)
Pertain to the performance of a product or service.
ex. Gortex provides functionality in outdoor rugged environments
Psychological needs (pt of step 1)
Pertain to the personal gratification consumers
associate with a product or service.
ex. Christian Louboutin's shoes go for upwards of $500.00
Internal search for information (stp 2)
Occurs when the buyer examines his or her own memory and knowledge about the product or service, gathered through past experiences.
Ex. You may visit your favorite restaurant based on past experiences
External search for information (stp 2)
Occurs when the buyer seeks information outside his or her personal knowledge base to make the buying decision
Ex. Talking with friends about an upcoming purchase.
The locus of Control (stp 2)
determines whether or not you believe you control your own fate, and therefore the effectives or worthiness of your search
Three types of risks are associated with purchase decisions (stp 2)
Performance, Financial, and Psychological. The higher the risk the longer a customer is likely to engage in an extended search.
The search process may differ depending on the type of product or service involved- specifically whether it is a shopping-, specialty orconvenience product.
The search process may differ depending on the type of product or service involved- specifically whether it is a --------, ---------- or ----------product.
Internal Locus of Control (stp 2)
Control Refers to when consumers believe that they have some control over the outcomes of their actions, in which case they generally engage in more search activities.
External Locus of Control (stp 2)
Refers to when consumers believe that fate or other external factors control all outcomes, in which case the generally engage in less search activities
Performance Risk (stp 2)
Involves the perceived danger inherent in a poorly performing product or service.
Financial Risk (stp 2)
Associated with monetary outlay including cost of purchase and cost of using the item or service. Ex. Extended warranties reduce the risk of buying a car.
Psychological Risk (stp 2)
are those risks associated with the way people will feel if the product or service does not convey the right image
Specialty Goods and Services (stp 2)
are products or services toward which the customer shows such a strong preference that he or she will expend effort to search for the best suppliers.
Shopping Goods/Services (stp 2)
are products or services for which consumers will spend a fair amount of time comparing alternatives, such as apparel, fragrances, and appliances.
Convenience Goods/Services (stp 2)
are those products or services for which the consumer is not willing to spend any effort to evaluate prior to purchase. Like water, bread or soap.
Universal sets (stp 3)
includes all possible choices for a product because it is to cumbersome for a single person to recall every possible choice, marketers focus on only a subset of choices.
Retrieval Sets (stp 3)
Those brands or stores that can be easily recalled from memory even those which the consumer may dislike
Evoked Set (stp 3)
Includes the subset that a consumer may actually decide to purchase from, excludes those which they dislike
Evaluation Criteria (stp 3)
consist of a set of salient, or important, attributes about a particular product.
Determinent Attributes (stp 3)
are product or service features that are important, or differ from the competition and therefore can be used to make a comparison.
Consumer Decision Rules (stp 3)
are the set of criteria that consumers use consciously or subconsciously to quickly and efficiently select from among several alternatives. Two types:Compensatory and Non-Compensatory
Compensatory Decision Rule (stp 3)
Assumes consumers decide based on a deliberate comparison and trades off products against each other
Noncompensatory Decision Rule (stp 3)
Occurs when consumers make a decision based on one or a few select attributes that are most important,
without regard for the other detriment attributes.
decision heuristics (stp 3)
are mental shortcuts that help a consumer narrow down choices. Price , Brand and Product Presentation
Ritual Consumption (stp 4)
are patterns of consumption tied to rituals like birthdays, or even something as simple as going to Starbucks every day for a cappuccino. Many firms tie products to theses ritualistic purchases.
Steps marketers take to ensure post purchase satisfaction (step 5)
Build realistic expectations, Demonstrate correct product use- , Stand behind the product or service , Encourage customer feedback, Periodically make contact with customer's
Post -Purchase Dissonance (stp 5)
buyers remorse, firm's attempt to reduce this feeling in customer's by reinforcing their decision.
Situational Factors (influence B2C process)
Includes Purchase situation, Shopping situation, and temporal state
Motive (psychological factor)
a need or want that is strong enough to cause the person to take action or seek satisfaction, According to Maslow's Hierarchy of Needs. Maslow categorized five groups of needs Physiological needs, Safety needs, Love needs Esteem needs, Self actualization
Physiological needs (Maslow's 5 needs)
deal with the basic biological necessities of life- food, drink, rest and shelter. Marketers try to convert these needs into wants as well
Esteem needs (Maslow's 5 needs)
allow people to satisfy their inner desires, with things such as Yoga, meditation, health clubs, and many books
Self actualization (Maslow's 5 needs)
occurs when you feel completely satisfied with life and how you live
Attitude (psychological factor)
a person's enduring evaluation of his or her feelings about and behavioral tendencies toward an object or idea. Consist of three components:
1. Cognitive Component - reflects what we believe to be true
2. Affective Component - involves what we feel about the issue at hand, our like or dislike of something
3. Behavioral Component - is the actions we undertake with regard to that
Perception (psychological factor)
the process by which we select, organize and interpret information to form a meaningful picture of the world. In marketing a product may be influenced by the colors, sounds, taste and packaging that we assign to things
Learning (psychological factor)
referrers to a change in a person's thought process or behavior that arises from experience and takes place throughout the consumer decision process. For instance in looking for a product a person may engage in a search, throughout the search process changes in a person's thought process may occur as they learn more about the product.
Lifestyle (psychological factor)
refers to the way consumers spend their time and money. Ex. A person who is an outdoorsman will often be on the lookout for equipment to use outdoors
Family (social factor)
Many purchase decisions are made with the consideration of the entire family, so firms must decide families make purchasing decisions. For some families decisions are shared, while in others they are made by one or two individuals. Children are playing an increasing role in family purchasing decisions.
is one or more persons whom an individual uses as a basis for comparison regarding beliefs, feelings, and behaviors. These groups affect buying decisions by
(1) offering information,
(2) providing rewards for specific purchasing behaviors.
(3) Enhancing a consumer's self image
factors specific to the situation, override, or at least influence, psychological and social issues, these include: Purchase situation Shopping situation
Purchase situation (situational factors)
Customers may be predisposed to purchase certain products or services because of some predetermined psychological trait or social factor, but these factors may change in certain situations. (ex given. A normally thrifty shopper, shops for something expensive and extravagant as a wedding gift)
shopping situation (situational factors)
Consumers might be ready to purchase a product or service but be completely derailed or distracted once they arrive at the store. Marketers counteract this by means of:
- Store atmosphere Use of colors lighting, music, scents, images all have shown to have a positive impact on a customer's purchasing decision.
- Crowding - Some customer's may leave if a store is overcrowded, customers with mobility issues may feel intimidated
- In store demonstrations Often in store demonstrations of food items, or other products can convince a customer to try things they otherwise would not
- Packaging - Making a particular product stand out among rows of similar items is difficult and marketers spend millions, designing and updating their packaging
- Temporal State A customer's state of mind at the time may determine a purchasing decision, if customer's are tired, angry, or in a depressed mood they may just decide to purchase a few needed items, or not shop at all. An angry mood may cause a customer to have a negative post purchase mood through no fault business. (i.e, parking ticket in the lot)
is the customer's degree of interest in the product or service there are two types of consumers when it comes to involvement levels:
High Involvement customer's pay greater attention to the details of an advertisement message as a result they develop strong attitudes and purchase intentions
Low Involvement consumers pay less attention to the details and are more likely to be persuaded by a heuristic details such as brand name, price, or the inclusion of a celebrity endorsement